So-called “Housing benefit” is of zero benefit to tenants. It is a massive flow of taxpayer cash to landlords – an incredible £25 billion per year. It plays a pivotal role in the growth of landlordism and the bubbling of house prices to well beyond the pockets of most young people.
It is argued on the right of politics that rent controls would be an unwarranted interference that would distort the housing market and prevent it operating efficiently. Yet housing benefit is itself a massive distortion, allowing landlords to charge rents far beyond what the market would ordinarily bear. If the state is to pay or top-up rents in this way, the state must also have a right to interfere in the level of rents.
For the sake of clarity of argument, I do not regard “Housing Associations” as anything but part of the landlord class, especially given the high salaries they pay their executives.
Both Jeremy Corbyn and Owen Smith have recently argued for a rent control solution – and in Jeremy Corbyn’s case he believes it. That would certainly be a vast improvement on the present situation. But my own view is that it is illogical to boost rents by a massive transfer of taxpayer cash to landlords by housing benefit, and then seek a second mechanism to control them.
Housing benefit should simply be abolished. The results would be the collapse of the buy to let market and the bankruptcy of some of the least lovely people in the country, a crash in rents, and the pricking of the UK’s property bubble, where homes are priced in much of the UK at 8 to 12 times average salary.
The abolition would need to be accompanied by a one year moratorium on all evictions until the market settles down and rents can be renegotiated. I do not rule out rent controls as part of the new arrangements to govern the market.
It is worth pointing out that as housing benefit is taken from general taxation, and as London accounts for an obscenely disproportionate percentage of housing benefit paid, it represents yet another hidden area where London sucks the wealth from the rest of the country.
Housing benefit is not actually a “benefit” to the needy at all. Have you ever wondered why the Tories make zero concerted efforts to cut this “benefit”, when they are so keen on driving disabled people to suicide and sanctioning the unemployed?
It is because housing “benefit” is the UK’s biggest con, a direct subsidy from the taxpayers to the very wealthy.
Best to transition by introducing a citizen’s income, which HB recipients would then be free to spend how they wished.
But they would still spend it on rent, because everyone needs somewhere to live, so it would still support outrageous rents.
Squirrel.
A nice sentiment, but many people wouldn’t spend the money for housing benefit on paying the rent. The result would leave many folk facing, the paying of rent arrears or worse still looking at eviction. Which in turn would put untold amounts of stress on homeless units, which are again, in the majority are private landlords, charging bloated rents.
Reading articles on Universal Credit, in which several benefits are paid together, monthly, one being housing benefit, it’s not a stretch of the imagination, that many folk will, and do, spend the money allocated for there rent on something else.
I receive housing benefit and it is paid to me and not to the landlord. So I already have the choice to spend it one something else, as does every other recipient I expect.
to Gary – that’s not correct, if you move out, you no longer receive housing benefit for that property.
That’s the idea. Given that they are receiving the money as a general income, the market will change. People will move from London into cheaper accommodation elsewhere. Living with parents or friends starts to become extremely beneficial. The result is that rental prices drop, which is the whole point.
Ideally, yes.
The question is how you do it without causing huge suffering to all the poor tenants currently depending on it.
The long term answer must be a huge expansion in social housing that is real social housing, as Jeremy Corbyn is promising. This means bringing back council controlled housing and returning Housing Associations to their original function and way of operating. You do realise that Housing Associations have been forced to charge higher rents than they would have chosen to? They have been played every which way by the government.
In the short term rent controls seem a good way of at least putting a brake on the “landlord bonus” as you accurately put it. The howls of outrage if anyone tries to do it will be unbelievable. But I think it is a truly Labour policy which will massive popular support. If Corbyn gets the chance to get his policies across to the public the result could be truly surprising (which is why the elites are so desparate to get rid of him asap)
The problem with a massive house building programme is that it eats up vast amounts of land. The beauty of Craig’s solution is that it could, if accompanied by other sensible measures, lead to the rational re-allocation of existing housing stock.
One of the related measures needed is a wealth tax: a levy on property in excess of a certain amount. Together with a graduated income tax, and putting an end to tax shelters, it would lay the ground for a long term solution.
In the short term properties unoccupied should be used to accommodate the homeless. Remember squatting?
Building is not the only way of creating council housing. If the housing bubble is pricked then there will be a need to control the deflation in house prices. Buying up housing stock of bankrupt landlords would be a good way of doing this.
I’d like to see a reforming of council tax so that more is paid on empty properties than occupied ones (possibly punitive rates), and more on tenanted than owner-occupied, and the owner as liable for the tax rather than the tenant.
Yes I used to squat, and it was a good thing for youngsters, and discouraged keeping buildings empty, but it would never work as a solution for all the people who would be homeless if HB was cut. We are talking millions of people here, including young families. Even a gradual move to do away with HB is going to cause huge suffering.
“The problem with a massive house building programme is that it eats up vast amounts of land.”
Not if the new homes are more densely built, high-rise in the cities and medium rise in the towns. Most modern estates are an order of magnitude less dense than the historic housing in our towns and cities, yet there is no shortage of people willing to live in those historic houses and to pay a premium to do so.
Another strategy might be to bring the one million or so empty properties back into use.
.
There are literally thousands of properties in zone 1+2 that sit empty as “land banking” it ought to be criminal. I’m being evicted as of today I got 6 months – why? Landlords want to build an extension – more money for them. I’m pretty heartbroken – we can’t afford to buy – we live in Islington, which is my home town our old flat we lived in for 20 years and were turfed out when our old landlord decided to give it to his “aspirational” son – we’ve seen the area go from shithole we love to overpriced shithole we love. My partner has health issues and and I work 10 hour days so I can’t afford to live further from my work.
The worst thing about this situation is that you can never have a home, you sit here at the landlord’s mercy living in fear that the email will turn up like it did this morning.
BTL landlordism is irresponsible – and I mean that quite literally in that the government does not require any responsibility other than the most basic forms ie – you mustn’t actually kill your tenant – other than that it’s up to them to play fincially roulette with our lives.
Really sorry to hear that.
It is criminal that landlords can just evict tenants on a whim, and tenants have no legal protection
Thanks Phil, heartbreaking is the only word that comes to mind, right now.
Can you imagine the shrieks of horror from The Mail and so on, as it contemplates a drop in house prices?
Politicians are too cowardly to consider euthanasia and the decriminalisation of cannabis. Incurring the wrath of the Establishment at what is the bedrock of their unearned wealth and income, i.e. inflated property portfolios and absurd income from the renting class, is way beyond their collective level of courage.
It won’t stop politicians of a right-wing persuasion from cynically making cutbacks, while they point to the ‘welfare bill’ (which includes subsidising businesses which underpay their employees, and landlords who overcharge their tenants), pretending they have real concern about they huge cost to the country.
Strange that Tories from Thatcher’s time have been insisting that “the market” has to establish its own levels, cannot be interfered with, and left to its own devices all will be perfect. Yet they interfere every chance they get, when it benefits the investor class.
Glen,
You are correct, certainly this government will not address it.
Talking of The Mail here is the latest news on the Scottish Labour Party’s new hiring:
http://www.thecanary.co/2016/08/30/not-content-with-losing-40-of-their-41-seats-in-scotland-labour-reveal-plan-to-shed-that-last-one-too/
Bevin.
First McTernan, the Murphy, now Roden, who next? Kelvin MacKenzie?
The Scottish Labour branch office, is almost closed, would the last one out please switch the lights off.
Sadly it isn’t, it has decamped on the NEC and is currently trying to strangle the rest of the party. These are utterly bizzare people who live in a Blair’s fantasy world where they’re are hugely popular – even though the message it quite the reverse. Undoubtedly though should they lose the last labour seat this will be blamed on Jeremy Corbyn. Let us not forget that McTernan has over seen four electoral defeats here and in Austrailia – he has absolutely no campaign ability and no talent apart from that of a wind up merchant. I do not know how he and the other non-MP labour hierarchy can possibly have more say over the party’s future than the elected leader and shadow front bench. They are bullies and brutes and they ought to be dismissed from the party immediately.
The Old Guard in the Labour Party, exemplified by Tom Watson, are determined to wreck the party before they leave it.
Job One is to disillusion all those who felt that joining the party and re-involving (or involving) themselves could lead to a better world for themselves, their neighbours and their descendants. If that idea caught on the political class might have to get real work, work that wouldn’t lead to their being confused with celebrities or sensible people.
Corbyn has already made the whole class of professional spin doctors, pundits, psephologists and political scientists obsolete by demonstrating how simple it is: put forward good ideas, involve everyone in critiquing them, developing them and sharing them. Then add a general election and watch.
Of course the whole point of the modern “career” politician is to obfusticate, block openly be deceitful and to prove themselves unworthy, in doing so they offer camouflage against the prying eyes of justice whilst their real employees plunder the state for juicy mortals – if you really want to see how it’s done read this
http://www.flassbeck-economics.com/traingate-virgin-care-richard-branson-and-how-the-billionaires-are-ruining-britain/
My sympathy with your situation Shatnersrug, I hope your partner will improve in that polluted air you breath in every day. Could not agree more about the control freaks at the NEC, I mean to stop local parties having meetings when they were just about to prepare their local candidates for next years elections.
WHAT IS LABOUR GOING TO DO IF THE TORY’S DARE TO ANNOUNCE A SNAP GE? they would be totally unprepared.
You cannot disband local democracy for the sake of old fashion last Millennium centrist control, its go to stop.
Labour needs to be dragged into the 21st century and the more they talk about a progressive Alliance and open up talks with others, the more it will dawn on them.
Elections are one of Labours sore heels and the scenarios that play out in Blackburn and Darwen, Bradford, Bolton and Birmingham, at every election, the tribal feeding, the tribal elders deciding what to vote for, the lack of democracy that exist in many homes, the postral vote frauds of the past, everything that happens under the FPTP system is rotten.
So they should have an interest to evolve the lot of voters, its new young members should make it clear to them that we had enough of safe seats and macabre feeding rituals from the 18th century.
Housing is a racket but the solution is not to throw needy people on to the streets which will happen after a years worth of moratorium. Those in danger of being evicted must also be prioritised for housing, over or equal to those who lumber at the top of the housing list.
Houses do take up a lot of space and we have to realise that many young people value having a life as much as going into lifelong debt for some shoddily built rabbit hutch too small for a king size bed.
Why is the building industry being cosseted? they are allowed to waste this valuable land to house 100 families, rather than building houses fro 80 families and an apartment for rent building for another 80 families, or more for that matter, on the same plot of land? why do we allow houses to be build for ownership alone, but have no obligation to provide public sector apartmenst, affordable rented housing that does not land young aspiring and mobile young people to get into debt for the rest of their lives. Housing should mean both and builders should be obliged to realise this.
We need apartments of all sizes but mainly one and two bedroom homes for those with young children. Housing should not just provide houses but realise that local services, schools surgeries and basic shops, which inevitably will be needed from day one, are provided in larger developments.
land banks are for speculators! they should be kept by non profit making organisations, ideally.
This is a common theme on the Houseprice crash website http://www.housepricecrash.co.uk which is a good place to go to for all those interested in the cost of housing both to buy and to rent.
“Housing benefit is not actually a “benefit” to the needy at all. Have you ever wondered why the Tories make zero concerted efforts to cut this “benefit”,
Craig.
I’m under the impression that “bedroom tax” is aimed at cutting the housing benefit bill. Would I be wrong in that assumption?
I agree that housing benefit in London, is higher than the rest of the dis-United Kingdom.
http://www.londonspovertyprofile.org.uk/indicators/topics/receiving-non-work-benefits/housing-benefit-values/
Arguably, RoS, the “bedroom tax” was designed to create more 1-bed flats, subdivide HMO even further and crowd the recipients of benefits into smaller accommodation. This provides more efficient use of space for landlords, with the perceived irrelevant side-effect of merely making life that much more cramped and miserable for tenants – and disrupting their lives as they’re pitched out when a child grows and leaves the home, for instance. But nobody cares about that – at least, nobody who matters.
Three one-bedoom premises will bring in a lot more cash one three-bedroom house, for example.
Fair points there Glenn, I’d also add that Lord Freud, who thought up the bedroom tax, (easy when you live in a eight bedroom mansion) did so to demonise to a certain extent, the disabled who quite often require a extra room for their medical equipment or adaptations.
It was Lord Freud, who said that disabled people weren’t worth the minimum wage, yet he kept his job.
http://www.independent.co.uk/news/uk/politics/lord-freud-past-gaffes-on-welfare-food-banks-and-bedroom-tax-revealed-9797082.html
However, scenarios where say someone is living in a three or four bedroom house, but only needs a one bedroom house, but doesn’t really want to move to allow say, a family to move in and use all the bedrooms, I could possibly see that as a better use of the spending of housing benefit.
Yes, obviously, it exists to exploit people who can’t move elsewhere. Had it only been imposed on people who won’t move out rather than those who can’t move out you would be right.
Interesting to hear that you’re not bothered by concerns about getting anyone to do any (low-income) house building. Surely the obvious consequence of slashing the returns on buy-to-let is a drop in house construction?
The end of the buy-to-let market would be a social good. Demand for house construction would be driven by the buy-to-live-in market and local authorities building council houses again.
Well argued Murray, 100% behind you on this, however, many of my colleagues living in Germany rent, the market has many controls and prices do not rise anywhere near as fast as in the UK – most in Germany actually rent and pay a bit more into the pension funds they all hold. Indeed, many rent because its actually cheaper than out right purchase via a mortgage and savings can go on other items, such as holidays, of which again our German peers have far more than the UK – its not all a one way street though, Germany has no minimum wage and pockets of poverty all of the place, but compared to the UK its a bloody paradise for regular folk.
Subsidies become ‘entitlements’ once established they become permanent. Much harder to enact a sunset on provisional law because it becomes normal and anticipated.
Farm subsidies started as assistance to family farms through crop choice incentives to keep the market healthy but graduated to Agro Giants like Monsanto who suck all the air out of it. Predators follow the scent of free money. ‘Natch.
BTW; Not all landlords are wealthy
They are a lot wealthier than their tenants.
I’d say so. Being a landlord generally means you have at least two properties – one to live in, one to rent – at a minimum. While the tenant has no property at all, and is forced to pay more than a mortgage would actually cost (which the value of the property itself increases).
This is not an enviable position on the tenant’s part, so it’s fairly safe to bet the landlord is not only considerably more wealthy that the tenant, but is in the process of becoming more so.
Having more than one house does not entitle the hordes to proclaim they have wealthy status.
Such notions are the counterfeit Left, dispossessed of their rational ideology.
It’s true that some wealthy individuals might be more rich than the landlords from which they rent the premises.
For instance, a corrupt “retired” cop could be using a rented accommodation to be a cannabis factory.
While his equally corrupt mates still on the payroll look the other way (while the filthy retired cop in question is busy growing the same hash he busted countless hippies for having small amounts of), this ex-pig is rolling in the cash, while the landlord might be some hapless dude just renting out a deceased Aunt’s residence.
What would be the chances of that though, eh Ben?
😉
Hear, hear. The best way of reducing the deficit is to impose fair rents on the private rented sector. The largest component of the welfare bill is housing benefit. And the largest element of public exspenditure is on welfare.
And once they find that their nest eggs are no longer so profitable, to buy back the former council houses they have been getting fat on and return them to public ownership,
Republicofscotland
August 30, 2016 at 15:53
Squirrel.
“A nice sentiment, but many people wouldn’t spend the money for housing benefit on paying the rent.”
“Reading articles on Universal Credit, in which several benefits are paid together, monthly, one being housing benefit, it’s not a stretch of the imagination, that many folk will, and do, spend the money allocated for their rent on something else.”
………………………………………………………………………………………….
Yes quite true RoS.
Housing benefit for private tenants is called local housing allowance. It is usually paid directly to the tenant, why I don’t fu.king know, many of who will have mental health problems; are unable to find work; have an addiction to drugs or alcohol; come from broken families or marriages etc.
It was Margaret Thatcher in 1989 who abolished to twin tenets of private sector rental policy which had prevailed in Britain since 1916, fair rents, and security of tenure. This position was supported by governments of both the left and the right, following Red Clydeside, and the Glasgow Women’s Rent Strike. Conservative minister Lord Balfour of Burleigh was sent to investigate the revolt, and discovered the women living in atrocious housing for sky high rents, part of war time inflation, whilst their men fought at the front. He returned saying that the country deserved ‘red revolution’ if it could allow this to happen. The Rent Act was rapidly passed. We didn’t quite get ‘homes fit for heroes’ but we did at least get rent controls.
In the inter-war and post war years much of this private stock was sold off as the profits from rents declined, often to the long term tenants. In this way owner-occupation gradually increased, boosted by more house building and easier finance.
Anybody who thinks house prices reflect the market is living in cloud cuckoo land. The housing market has always been politically manipulated. It used to be that owner-occupiers could get tax relief on mortgages. That was abolished in the 1990s. It was replaced by tax relief for landlords. Landlords could get tax relief on any expenditure they incurred on their rented property.
Thatcher’s Short Assured Tenancy Act (1989) abolished fair rents, replacing them with market rents. And security of tenure was abolished to be replaced by a lease of six months at a time.
MBC, where were you when the Rent Acts were in force? I was looking for somewhere to rent and there was nowhere. Sure those lucky enough to be renting when the acts came into force were onto a winner, but from then on, as landlords realised that renting out a property was tantamount to giving it away, the ladder had been well and truly drawn up for those wanting to rent.
I’d agree that the Short Assured Tenancy Act (1989) wasn’t the answer to the problem, but you must admit the problem was there in the first place.
I’d agree it went from one extreme to the other. A more moderate settlement, fairer to both parties is needed. In Norway the minimum legal rental period is three years, not six months, but either party can terminate the agreement in specific circumstances, by paying a penalty. And the rent is set at a fair level. But Thatcher created a landlord bonanza, so that now there is plenty of rental property but fewer and fewer people can afford it and they are not even moderately secure either. The landlord bonanza also pushed up pricrs for people trying to get on the ladder as well.
I’d agree that there’s been landlord bonanza, but not because of the legislation, but because of the lowering of the interest rate to practically zero. This has fed through into a huge property (land) price bubble, so that, over the last thirty years, for many people, their property has earned them more money than they have earned by working. So being a landlord has been a no-brainer: you get all that lovely capital appreciation AND an income. As interest rates have fallen, less and less of that income has had to be paid out in interest, more and more has ended up in the landlord’s pocket. Now if interest rates started to drift up again, then property prices would begin to fall and you would see landlords baling out of the business like rats leaving a sinking ship, all except those kept afloat by their HB lifebelts, of course.
I’d agree about HB, but the solution is not to abolish it, but subject it, and only it, to rent controls. Ricardo’s Law of Rent says that rents are set by the ability of tenants to pay. The ability of tenants in receipt of HB to pay is set by the level of HB payable. The level of HB payable is set by the rents demanded. A classic case of positive feedback. No wonder HB rents are sky high, the only thing limiting them is what the politicians can get away with giving to their landlord friends. If HB was limited to the rent payable on local social housing, this positive feedback loop would be broken and the enormous cost of HB would be curbed until such time as enough new social housing is built to make it unnecessary.
Was Ricardo factoring in immigration? Fewer tenants can afford sky high rents but in London there is always going to be somebody desperate for a place who will pay it.
That’s more about different attitudes to affordability than what Ricardo was factoring in. In my parents’ day, young single professionals thought nothing of sharing bedrooms, but today you’d be considered pretty desperate if you had to share your bedroom with someone else.
In the east and north east some housing associations acquired council houses and even whole housing estates at below-market prices. Now what some of them are doing is saying it is too costly to renovate this stock so they’re simply demolishing them, often hundreds of houses/flats/maisonettes at a time. This immediately does two things; it raises the value of their remaining properties, and it increases the rents in those that remain. Until we class a home as a right and not an investment asset we will be plagued by increasing market-driven homelessness, but the Tories won’t do it because the rich don’t become homeless and the homeless don’t become Tories.
Republicofscotland
August 30, 2016 at 16:13
However, scenarios where say someone is living in a three or four-bedroom house, but only needs a one bedroom house, but doesn’t really want to move to allow say, a family to move in and use all the bedrooms, I could possibly see that as a better use of the spending of housing benefit.
………………………………………………………………………………
I agree to the logic there RoS but the bedroom tax doesn’t apply to home-owners. They may be single and living in a four bedroom house, for example.
All wonderful stuff. However, a quarter of all new house sales go to individual (reluctant) buy-to-let landlords seeking safe haven from so called ‘financial advisors’ and bankers to provide some sort of pension income as these same investors know their money is being stolen through A) Pension taxation or B) the charlatans masquerading as ‘financial advisors’ who walk away from the terrible losses of their investments that simply cannot return yield without high risk.
By collapsing the rental market in such a dramatic way, hundreds of thousands of pensioners and on-the-line middle class workers would face serious financial difficulties and losses, especially in an environment where no evictions could take place. However, I do agree that the housing bubble should be let down. Real competition from young buyers would counter-balance a market which has been rigged with all sorts of market distorting mechanisms like ‘save-to-buy’, Isas and the like. Lastly stop foreign buyers sheltering their illegal billions in the housing market.
I find it sickening that landlords have been bailed out with huge interest rate cuts yet charge record high rates at the expense of first time buyers getting no interest for their deposits.
The housing benefit money should be spent on building council houses not bailing landlords who avoid tax and commit mortgage fraud by lying about their non existent repayment vehicles on their interest only mortgages.
Time to clamp down on tax payer funded housing benefit bailing out landlords and propping up the housing bubble.
I hate to break it to you, Craig, but your plan is already being put into effect, in a rather less sudden and dramatic way than you envisage, with the gradual introduction of Universal Credit.
A friend of mine was recently transferred onto UC from Job-Seekers Allowance, and was outraged to discover that his landlord proposed to charge him 25% of his UC for the privelege of living in cramped and substandard accommodation.
He is now looking for somewhere better and cheaper.
Result.
I say this through gritted teeth, but this is one thing the Tories may actually be doing right.
Grhm “He is now looking for somewhere better and cheaper.
Result.”
And how’s that going? Is it a ‘result’ just because he’s looking? We can solve the problem just by making receivers of HB get off their arses? I rather doubt it.
Universal Credit (if it ever works) will bring down the welfare bill, but mainly at huge cost to the recipients rather than causing landlords great pain.
I see what you mean, but Craig’s proposal is equally dependent on exploited tenants “getting off their arses”, is it not?
If the private renting market is to play any part in solving the current housing crisis, then arses will inevitably have to be gotten off.
That’s the trouble with markets.
Council housing is what we really need, of course.
Craig’s proposal would cause huge suffering. It isn’t feasible.
As you say, council housing is the answer. Why are we (the taxpayer) paying huge amounts to private landlords in HB when we could be buying the houses and renting them out at reasonable rates?
The boiling frogs stuff that’s been happening in the UK over the last three decades, particularly with regard to housing, is in direct contravention of Article 25 of the Universal Declaration of Human Rights, which was adopted by the UN General Assembly in 1948:
“Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.”
Of course these days the UN has become as impotent as the old League of Nations. It was, arguably, the failure of the League of Nations that led to the biggest slaughter in human history, which in turn led to the ‘post-war consensus’ (for a fairer and saner world), which has now been ripped to shreds…
http://www.newstatesman.com/politics/uk/2016/06/un-declares-uk-s-austerity-policies-breach-international-human-rights
I agree with many of your points Craig but you are wrong to lump all Housing Associations in the bag. Many HAs provide special needs accommodation that houses low income highly vulnerable people.
The social housing and real estate markets need to be disentangled and right to buy withdrawn. Offer a tax-free sum to be used as a deposit to help those who want to buy.
The two million council homes sold off have been a catastrophe to the tax payer.
It’s been done before and we, by rights, ought to be ale to do it again.
The Economy of the UK suffers from mal-investment. That is the FIRE sector ( Finance,Insurance and Real Estate) absorb 92% of all investment.
Banks do not like risk,and property is a no- brainer investment in the UK when you have a net inflow of migrants of 330,000 per year.
They need accommodation and so there is a massive apartment building programme ongoing in the inner cities. There is obviously no shortage of tenants and should there be unemployed seeking accomodation, they can always access Housing Benefit.
Craig is correct and Housing Benefit is a means of looting the State by the Finance sector of approx £25billion/year.
If you wish to build a factory on a patch of land and approach the bank for a loan , you will be laughed out the door.
Secure planning permission for a high rise apartment block on the same land and the bank manager will near bite your hand off for your signature on the loan.
Housing benefit and inward migration are part of the same scam and the reason the Tories do not effectively control our borders.
The only cure is direct construction of council accomodation to prick this bubble of housing inflation, but the Tory Party are never about to allow Councils the investment to do this.
It is understandable why the MSM constantly demonise Jeremy Corbyn, he offers solutions which interfere with the continued looting of the state, by privatisations and by the politically created housing crisis.
The Tory Party has always served their Financial Masters first.
The entire Western economic system is completely bent – artificially distorted -and the more bent it is, then the greater the need for it to be supported by props such as housing benefit and tax credits. All of this is primarily to the benefit of the already rich…
But if you suddenly pull all these artificial props away, then the entire economic system will collapse, all the banks will go bust, and the very poorest in society will be the very first to be hit.
The current complete financial lunacy needs to be slowly and gently dismantled, rather than just pulling the rug on the entire house of cards.
What would happen, if the ATM’s no longer issued money? What would happen if the suppliers, could not be paid, and they also could not pay their suppliers?
We now live in a highly efficient “just in time” delivery system re essential services, like food, water and energy, but it has no contingency built in. It’s dependent on a complex chain of events – all working near perfectly. Very few people have seriously thought about what will happen – if the economic system – or the basic energy infrastructure collapses, which could happen by an entirely natural event like for example a massive volcano going off – or even a few nukes.
The dust storm would result in the sun being largely blanked out for a few years…
It would get very cold and very little would grow.
Where does a can of baked beans come from?
Tony
@ Tony,
That old chestnut that the ATM will not issue money is complete bollix. The Royal Mint prints the money under the control of the Treasury and the Bank of England. This currency is then distributed to the Banks, who are charged a small amount .called seignorage, for the printing costs.
Should the banks go on strike or are not co-operative, the Govt controlled Post Office can distribute cash. (another reason ,why privatisation of the Post Office is a bad idea).
Cash money in circulation is only 3% of the credit in the system. The remaining 97% is credit created by the banks when they issue a loan by their fraudelent + and – bookkeeping system.
Tony, at the risk of sounding like the record’s stuck I’ve been saying this for ages.
At the outbreak of WW2 Britain was no longer self-sufficient in food. As a result of this tens of thousands of merchant seamen died on the convoys during WW2, to keep Britain from starving.
After WW2 the British government went full on for self-sufficiency in food. The Archers radio programme started life as a Ministry of Agriculture propaganda piece to encourage this.
With the advent of the neo-cons this has all gone by the by. Britain is once again just 48 hours away from anarchy and starvation.
But of course, whether Mr Corbyn sits or stands on a train is much, much more important…
The fraud is endemic. It is part of the neo-liberal system, another round of enclosures, clawing back, both individual and collective, wealth from the public and handing it over to the class which makes the laws, controls the government and teaches the gullible that it is looking after their best interests.
http://www.commondreams.org/news/2016/08/30/irelands-outrage-over-eus-apple-ruling-reveals-fraudulent-global-tax-system
I’ve been saying this for so long .
Craig, this is a better post topic than your last one, which I thought was a tad polemic.
There is something fundamentally wrong with the UK HB system and how it is abused by Landlords. A change may of course rock several boats including house values, which appears to be a line in the sand (if you will excuse mixed metaphors) because a radical decline in house prices would be expected to have adverse consequences for consumer and business consequences across the UK. Perhaps public QE could come to the rescue and offset the negative effects of a major fall in house prices, but any politician would either need to have steel balls or be facing an extraordinary situation to allow say 50% collapse in house values and to then spend a trillion on some major public works such as council houses, industrial regeneration, stockpiling of commodities, investment in infrastructure and education and training.
It is notable that the French property market remains far more affordable notwithstanding the extent to which properties are let. It may be that this is because of French rent controls, but I do not know and have not researched it. There may also be something in the fact that the British property market, or more accurately the English market is perceived to be more liquid and easy to transact within. If you were an advisor to Russian or Far & Middle Eastern HNWIs seeking to invest in property you might look to value or perhaps you would look to markets which can move fast and are therefore more amenable to rapid growth i.e. UK. Is it good that the UK property market is so open and liquid? To some extent Osborne address this with his significant stamp duty increases and perhaps an effect has begun.
Anyway and by the way, an unrelated question (*) is whether it would be reading too much into Dublin’s Apple tax googly to the US to suggest that it is somehow symptomatic of a broad drifting apart of the EU (or some EU factions) and the US/UK?
(* I accept that as this is not my blog such irrelevant questions might be moderated out of existence if you should so wish.)
Fool, before any of your comment is moderated out of existence we would need to understand wtf it is you are *trying* to say? You love listening to the sound of your own voice, don’t you?
“Craig, this is a better post topic than your last one, which I thought was a tad polemic.”
The post about Gene Wilder was too polemic for you?
I lived in France for 11 years and was both a home owner and a housing association tenant. I would guess that the affordability of houses is due, in part at least to:
1. Lower land prices (less swathes of huntin-shootin-fishin land owned wealthy toffs?)
2. Lower population density
3. Greater availability of quality rented accommodation ( the housing association place I rented was great – I’d never get that here in Paisley).
Obviously Paris, Provence, Cote d’Azur are expensive but France is still mainly rural and most places are affordable – even quite desirable smaller cities like Toulouse.
There is still, generally, less of a selfish, ‘no such thing as society’ attitude in France (even under supposedly right wing governments) and I think less vilification of those in need. Btw, I’ve never anyone talk about rent controls while I lived there.
39% of Conservative MPs are also landlords.
22% of Labour MPs.
26% of SNP MPs.
Agree with all the above.
My Dad bought a house in Lee SE12 in 1969 at about 4-5 times his gross salary – not greatly above average. Today it would be about 20 times that amount, adjusted for inflation. QE and the shift from productive industrial investment towards static asset investment is creating a massive future crisis for the UK economy.
Is it in principle vastly different to the idea of working tax credits? Yes, in the instance of tax credits, it is paid to the claimant, but it just nods to the fact that the job doesn’t pay a living wage. It’s in effect just a subsidy to the employer so they can bank more profits.
Absolutely correct.
And most ‘Aid’ is tied to buying stuff from the donor country.
The Greek ‘bailout’ (which they didn’t want) was to pay US and north European private banks.
The list goes, the tune remains the same
The government has already put a limit on housing benefit. Ie I’m allowed 665 per month and I have to pay the difference trouble is a 2 bed flat cost 750 a mnth min which is causing financial problems. Ive been blessed mine is 700 mnth. The trouble now is landlord’s are refusing to rent to people claiming house benefits. You cannot stop housing benefit as most wages do not cover the cost of renting a place
Aimi, AFAIK, the problem about landlords refusing to rent to HB claimants comes from the insurance companies not wanting to insure the property if benefit claimants live there.
“You cannot stop housing benefit as most wages do not cover the cost of renting a place”
If you can only afford to pay £85/month and rents are £750/month, then either there are enough people who can afford to pay £750/month out of what they earn to rent all the accommodation in your area, or the difference is made up by the fact that people who can only afford £85/month are being given £655/month in HB. I would suggest that the first scenario is unlikely, more likely is the scenario where, with HB reduced, rents would fall also. The alternatives for the landlord are to receive less rent or evict the tenants and receive no rent at all. Sadly, it is the case that stupid enough to go for the second option until their properties had been empty long enough for them to realise they have to drop the rent, which is no consolation to the evicted tenant.
What a load of rubbish. Housing benefits are capped. Where would all the unmarried mothers with kids live. Abolish housing benefits and let people live rent free for a year.. Really! The property would be repossessed and tenants thrown out. You don’t obviously care about tenants. Most landlords provide a service to those who want children without working, those who don’t try to better themselves, a lot of the younger generation, who want everything without saving for their future. Keep blaming the older generation, who might have bought properties to rent out, like my husband and myself. My husband worked sixty hours a week, took in lodgers, students to better ourselves and went without. People these days haven’t a clue how to help themselves. They are pampered by the government with all the handouts. Housing benefits are there for people who can’t help themselves.GET REAL.
Your husband perhaps had a secure job and a reasonable pension? Hard for someone joining the labour market to find those nowadays. In addition, demand for skills mutates from year to year with technological advances. Never mind graduates, even new PhD’s find themselves stacking shelves for sweeties these days, and apprenticeships are a dying breed. Interest rates on savings have crashed. The old wisdom has been abolished. Young people today are no longer able to pick up their first property for a song (relatively speaking). The system is weighted against single-income households. There are all sorts of reasons why your panacea doesn’t work. Now step away from that copy of the Sun…
“What a load of rubbish. Housing benefits are capped.”
Not at a level that makes any difference.
“Where would all the unmarried mothers with kids live.”
Same as where any other poor people live. Someone’s got to produce the next generation of taxpayers and if the rich won’t do it, the poor must.
“Abolish housing benefits and let people live rent free for a year.. Really! The property would be repossessed and tenants thrown out.”
What part of “a year’s moratorium on evictions” are you having problems with? It would apply to everyone, not just landlords.
“You don’t obviously care about tenants. ”
Don’t you mean landlords?
“Most landlords provide a service to those who want children without working, those who don’t try to better themselves, a lot of the younger generation, who want everything without saving for their future.”
Most landlords provide a service, inasmuch as they provide any service at all, to people who do not want to or cannot afford to buy somewhere to live. Why should everyone try to better themselves? By definition, we can’t all be upwardly mobile, it’s like everyone trying to be better than average. Most people want everything without working for it, but we can’t all be landlords.
“Keep blaming the older generation, who might have bought properties to rent out, like my husband and myself”
You’re the one who mentioned the “older generation”, not Craig.
“My husband worked sixty hours a week, took in lodgers, students to better ourselves and went without.”
Well done him. Perhaps you would like to explain how this entitles him to cash handouts from the state on top of his pension.
“People these days haven’t a clue how to help themselves. They are pampered by the government with all the handouts.”
Society has always been lumbered with such people. If they are rich, it’s not a problem. If they are poor, it is, because they starve and are homeless and cause civil unrest as a result. That is what the government gives them money, not out of a sense of benevolence. Or would you prefer gangs of starving beggars roaming the streets?
“Housing benefits are there for people who can’t help themselves.”
How about the state builds its own housing for such people? We could get the local authorities to do it and call it “Council Housing”. Then there’d be no need for HB. No more “handouts”. That should make you happier, shouldn’t it?